Growth or Bust
On the 20th of March George Osborn will deliver his annual budget, in which he intends to stick to plan A, but has forgot what plan A is. The government’s original plan was for the private sector to lead the recovery and subsequently pay of public sector bills. This is a good plan one I agree with and has my full backing but the government has pursued policies which have restricted private sector growth and subsequently have led to greater borrowing and prevented a reduction in the deficit. For the Conservatives to stand a real chance at the next election the chancellor needs to produce a Tory plan for growth or be prepared to return to opposition. March 20th is a fantastic opportunity to unveil such a budget.
For a start they need to stop attacking the banks by forcing them to hold more cash and capital they are restricting lending to small and medium sized businesses, this means businesses can’t expand and subsequently supply extra jobs and increase demand (they must also fight the proposed EU cap on bankers bonuses which will only lead to an exodus of talent). This policy is anti-enterprise, that makes it anti Tory, and the last time I checked the Tories were supposed to be in government. We also need to cut the high taxes on fuel this will not only be great for haulage firms but will subsequently lower costs for small and medium businesses it will also lower the cost of living for your average family, as the cost of running a car is unacceptable. A cut in VAT reducing it back down to 17.5% or greater, combining this with a cut to fuel tax and your average families spending power will increase. We also need to lower the top rate of tax from 45% to 40% to encourage investment and a bottom rate tax of 10p would also be desirable. The growth which will come from such a growth plan will allow the government to start reducing the deficit. Also the growth will allow for a rise in interest rates to tackle inflation and again lower the cost of living however the timing of a rise in interest rates is important as it could have a drastic effect on people’s mortgages. As the economy grows due to a Tory growth plan similar to this, the government will still need to implement some more cuts to spending this means international aid and the NHS cannot be spared. It is the Chancellor’s choice growth or bust.